Apple TV with A4 chip to retail for $99?

A new Apple rumor popped up over at Engadget, the gadget site heard the firm is working on a new Apple TV based on the A4 processor. The device will reportedly be launched for $99, it will play 1080p HD video but the drawback is that the flash storage capacity will be limited to 16GB, while the current Apple TV offers 160GB. The main focus will be on cloud-based streaming, but those who desire lots of storage capacity should be able to utilize a Time Capsule for external storage.

The device is said to be quite small with a scarce amount of ports (only the power socket and video out), and has been described to some as "an iPhone without a screen." Are you ready for the real shocker? According to our sources, the price-point for the device will be $99. One more time -- a hundred bucks.

Not only will this be priced to sell (like hotcakes), it seems that Apple is moving away from the model of local storage, and will be focusing the new ATV on cloud-based storage (not unlike Amazon's streaming scheme, though we're talking instant-on 1080p, a la Microsoft). For those still interested in keeping their content close, there will be an option to utilize a Time Capsule as an external storage component, but the main course will be all about streaming.